Types of FDs
There are different options when it comes to investing in a Fixed Deposit today, with each one catering to a specific requirement. Contrary to popular beliefs, banks aren’t the only organisations which offer FDs, with some corporates too jumping onto the fixed deposit bandwagon. Mentioned below are some of the popular FD options for you.
- Standard Fixed Deposit – These are fixed deposits which have fixed tenures which generally range from a few days to 10 years. Interest rates on such FDs are typically fixed for deposits of a particular tenure.
- Special Fixed Deposit – These are fixed deposits with unique tenures, earning a higher interest compared to others.
- Senior citizen Fixed Deposit – These fixed deposits are specially designed for senior citizens, offering higher interest rates and flexible terms in most cases.
- NRE Fixed Deposit – A Non Resident External (NRE) account can be opened by NRIs who wish to have a high return deposit. This can be maintained in Rupees and is ideal for those looking for an avenue to invest their foreign income. These deposits do not attract tax in India, making it a great investment option. This account can be opened in specific banks only.
- NRO Fixed Deposit – A Non-Resident Ordinary (NRO) account can be opened by NRIs residing in any part of the world. The interest earned through this deposit is taxable in India. Typically, most NRO FDs have a tenure ranging from 7 days to 10 years, giving you flexibility in terms of your deposit period. These can be opened with banks, with different incentives provided by different banks.
- Corporate Fixed Deposit – A corporate or company fixed deposit is an investment option offered by companies. Individuals have an option to invest in these deposits for a fixed period, with the company offering attractive interests on the investment. Typically one should exercise caution while investing in a corporate FD as the deposit is unsecured, making it a risky investment option.